VILLAGE OF ROSEMARY FINANCIAL STATEMENTS FOR THE …€¦ · VILLAGE OF ROSEMARY Statement of Operations For the Year Ended December 31, 2011 REVENUE Net municipal taxes, Schedule

VILLAGE OF ROSEMARY

FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2011

PAGE

AUDITORS’ REPORT

STATEMENT OF FINANCIAL POSITION 2

STATEMENT OF OPERATIONS 3

STATEMENT OF CHANGE IN NET FINANCIAL ASSETS (DEBT)

STATEMENT OF CASH FLOWS

4

SCHEDULE OF CHANGES IN ACCUMULATED SURPLUS 6

SCHEDULE OF TANGIBLE CAPITAL ASSETS 7

SCHEDULE OF PROPERTY AND OTHER TAXES

SCHEDULE OF GOVERNMENT TRANSFERS

SCHEDULE OF EXPENSES BY OBJECT

SCHEDULE OF SEGMENTED DISCLOSURE

NOTES TO THE FINANCIAL STATEMENTS

10

I1

12

AUDITORS’ REPORT

THE MAYOR AND COUNCIL OFVILLAGE OF ROSEMARY

Report on the Financial Statements

We have audited the accompanying financial statements of the Village of Rosemary, which comprise thestatement of financial position as at December 31,2011, and the statements of operations, change in net financialassets (debt) and cash flows for the year then ended, and a summary of significant accounting policies and otherexplanatory information.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordancewith Canadian public sector accounting standards, and for such internal control as management determines isnecessary to enable the preparation of financial statements that are free from material misstatement, whether dueto fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted ouraudit in accordance with Canadian generally accepted auditing standards. Those standards require that we complywith ethical requirements and plan and perform the audit to obtain reasonable assurance about whether thefinancial statements are free of material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in thefinancial statements. The procedures selected depend on the auditors’ judgement, including the assessment of therisks of material misstatement of the financial statements, whether due to fraud or error. In making these riskassessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of thefinancial statements in order to design audit procedures that are appropriate in the circumstances, but not for thepurpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includesevaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates madeby management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our auditopinion.

Opinion

In our opinion, the financial statements present fairly, in all material respects, the financial position of themunicipality as at December 31,2011 and the results of its operations, change in its net financial assets (debt) andits cash flows for the year then ended in accordance with Canadian public sector accounting standards.

CHARTERED ACCOUNTANTS

BROOKS, ALBERTAMARCH 5, 2012

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VILLAGE OF ROSEMARY

Statement of Financial PositionDecember 31, 2011

2011 2010

FINANCIAL ASSETS

Cash and temporary investments (Note 2)

Taxes and grants in place of taxes (Note 3)

Trade and other receivables

Land held for resale inventory

Investments (Note 4)

Other financial assets

TOTAL FINANCIAL ASSETS

LIABILITIESAccounts payable and accrued liabilitiesDeferred revenue (Note 5)Long-term debt (Note 6)

NET FINANCIAL ASSETS (DEBT)

NON-FINANCIAL ASSETSTangible capita! assets (Note 8)Prepaid expenses

ACCUMULATED SURPLUS (Note 10)

$ $

237,675 394,12412,658 8,12092,927 98,376

107,098 139,22710 10

11,990 14,170462,358 654,027

183,431 39,264100,057 352,359108,178 118,722391,666 510,345

70,692 143,682

4,145,833 3,514,2557,451 8,049

4,153,284 3,522,3044,223,976 3,665,986

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VILLAGE OF ROSEMARY

Statement of Operations

For the Year Ended December 31, 2011

REVENUENet municipal taxes, Schedule 3Government transfers for operating, Schedule 4Investment incomeUser fees and sale of goodsPenalties and costs of taxesFranchise and concession contractsOther

EXPENSESLegislativeAdministration[:ire, ambulance and bylaws enforcementRoads, streets, walks and lightingWater and wastewaterWaste managementParks and recreationOther

SHORTFALL OF REVENUE OVER EXPENSES BEFOREOTHER, Schedule 6

OTHERGovernment transfers for capital, Schedule 4

EXCESS OF REVENUE OVER EXPENSES

ACCUMULATED SURPLUS, BEGINNING OF YEAR

ACCUMULATED SURPLUS, END OF YEAR, Schedule 1

Budget$

2011$

2010$

252,918201,410

1,005176,487

4,60016,9505,700

659,070

251790128423

1,876197274

8045170938467

612,968

238,403124,639

305148,086

4,70814,1066,727

536,974

19,500157,493 139,586 13991,538 75,791 74

121,060 143,087 110186,766 176,502 14429,220 28,202 3230,696 31,803 2361,857 53,555 49

698,130 672,779 587

24,253 13 978395111570921221149046391

(39,060) (59,811) (50,417)

595,936 617,801 412,482

556,876 557,990 362,065

3,665,986 3,665,986 3,303,921

4,222,862 4,223,976 3,665,986

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VILLAGE OF ROSEMARY

Statement of Change in Net Financial Assets (Debt)

For the Year Ended December 31, 2011

EXCESS OF REVENUE OVER EXPENSES

Acquisition of tangible capital assetsAmortization of tangible capital assets

Acquisition of prepaid assetsUse of prepaid assets

Budget 2011 2010$ $ $

556,876 557,990 362,065

(728,376) (805,872) (416,095)175~000 174,294 152,734

(553,376) (631,578) (263,361)

-- (7,451) (8,049)-- 8,049 8,111

-- 598 62

(DECREASE) INCREASE IN NET ASSETS

NET FINANCIAL ASSETS (DEBT), BEGINNING OF YEAR

NET FINANCIAL ASSETS (DEBT), END OF YEAR

3,500 (72,990) 98,766

143,682 143,682 44,916

147,182 70,692 143,682

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VILLAGE OF ROSEMARY

Statement of Cash FlowsFor the Year Ended December 31, 2011

JMH&CO.

2011 2010

OPERATING

Excess of revenue over expenses

Non-cash items included in excess of revenue over expenses:

Amortization of tangible capital assets

Non-cash charges to operations (net change):

Increase in taxes and grants in place

Decrease (increase) in trade and other receivables

Decrease (increase) in land held for resale inventory

Decrease in prepaid expenses

Increase in investments

Decrease in other financial assets

Increase in accounts payable and accrued liabilities

(Decrease) increase in deferred revenue

CASH PROVIDED BY OPERATING TRANSACTIONS

CAPITALAcquisition of tangible capital assets

CASH APPLIED TO CAPITAL TRANSACTIONS

FINANCINGLong-term debt repaid

CASH APPLIED TO FINANCING TRANSACTIONS

CHANGE IN CASH AND CASH EQUIVALENTS

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR

CASH AND CASH EQUIVALENTS, END OF YEAR

$ $

557,990 362,065

174,294 152,734

(4,538) (5,597)5,449 (44,531)

32,129 (17,143)598 62

- (1032,180 4,360

144,167 16,284(252,302) 231,233659,967 699,457

(805,87~ (416,095)(805,872) (416,095)

(10,544) (10,097)(10,544) (10,097)

(156,449) 273,265

394,124 120,859

237,675 394,124

CASH AND CASH EQUIVALENTS ARE MADE UP OF:Cash and temporary investments (Note 2) 237,675 394,124

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VILLAGE OF ROSEMARYSchedule of Changes in Accumulated Surplus

For The Year Ended December 31, 2011Schedule 1

Revenue:Balance, beginning of year

Excess (deficiency) of revenues over expensesRestricted funds used for operationsCurrent year funds used for tangible capital assetsAnnual amortization expenseLong term debt repaid

Change in accumulated surplus

Balance, end of year

Equity inUnrestricted Restricted Tangible Capital

Surplus Surplus Assets

170,453 100,000 3,395,533

557,99050,000 (50,000)

(805,872) - 805,872174,294 - (174,294)(10,544) - 10,544

(34,132) (50,000) 642,122

1361321 501000 41037~655

2011

$

3,665,986

557,990

557,990

412231976

2010

$

3,303,921

362,065

362,065

316651986

The accompanying an integral part of these financial statements

VILLAGE OF ROSEMARYSchedule of Tangible Capital Assets


Cost:

Balance, beginning of yearAcquisition of tangible capital

assetsConstruction-m-progressDisposal of tangnble capital

assets


Accumulated Amortization:

Balance, beginning of yearAnnual amortization

Accumulated amortization on

disposals


Net Book Value o1Tangible Capital Assets

Land

$

167,938

167,938

Land Engineered Machinery &Improvements Buildings Structures Equipment Vehicles 2011 2010

$ $ $ $ $ $ $

202,929 184,574 4,332,136 151,361 327,406 5,366,344 4,950,249

53,967 - 695,541 56,364 - 805,872 308,829_ - - 107,266

- (4,820) - (4,820)

256,896 184,574 5,022,857 207,725 ~327,406 6,167,396 5,366,344

8,118 36,507 1,580,948 85,182 141,334 1,852,089 1,699,355

10,016 3,692 125,113 17,866 17,607 174,294 152,734

(4,820) (4,820)

18,134 40,199 1,701,241 103,048 158,941 2,021,563 1,852,089

167~938 238~762 144~375 3~321~616 104~677 168 465 4~145~833 3~514,255

The accompanying an integral part of these financial statements_-7

VILLAGE OF ROSEMARY

Schedule of Property And Other TaxesFor the Year Ended December 31, 2011

Schedule 3

TAXATIONReal property taxesGovernment grants in place of property taxes

REQUISITIONSAlberta School foundation fundNewell seniors foundation

NET MUNICIPAL TAXES

Budget 2011 2010

310,138 309,010 293,5392,454 2,454 3,180

312,592 311,464 296,719

56,088 56,088 54,8333,586 3,586 3,483

59,674 59,674 58,316

252,918 251,790 238,403

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VILLAGE OF ROSEMARY

Schedule of Government TransfersFor the Year Ended December 31, 2011

Schedule 4

TRANSFERS FOR OPERATINGProvincial governmentOther local governments

TRANSFERS FOR CAPITALProvincial governmentFederal governmentOther local governments

TOTAL GOVERNMENT TRANSFERS

Budget 2011 2010

139,560 67,915 62,42961,850 60,508 62,210

201,410 128,423 124,639

555,783 577,153 184,37240,153 39,711 221,610

937 6,5O0595,936 617,801 412,482

797,346 746,224 537,121

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VILLAGE OF ROSEMARY

Schedule of Expenses by Object

For the Year Ended December 31, 2011Schedule 5

EXPENDITURESSalaries, wages and benefitsContracted and general servicesMaterials, goods and utilitiesInterest on long-term debtAmortization of tangible capital assetsOther expenditures

Budget 2011 2010

146,768 154,963 132,244168,090 146,853 122,014158,266 144,483 128,417

6,517 6,244 6,691175,000 174,294 152,73443,489 45,942 45,291

698,130 672,779 587,391

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VILLAGE OF ROSEMARYSchedule of Segmented Disclosure


Revenue:

Net mumcipal taxes

Government transfers

Investment income

User fees and sale of goods

Penalties and cost of taxes

Franchise and concession contracts

Other revenues

Expenses:Salaries & wages

Contracted & general servicesGoods & supplies

Long-term debt interest

Other expenses

Net revenue, before amortization

Amoruzation expense

Net Revenue

General ProtectiveGovernment Services

251,79015,5281,629

45,7458,045

17,0933,635

343,465

48,37124784

4,832

53,534

Transportation Water & Waste Recreation &Services Management Culture

8,266

11,778 52,746

141,683 1,495

2011

251,790128,423

1,876197,274

8,04517,0938,467

8,266 153,461 54,241 612,968

68,831 40,346 45,78646,653 13,446 5,831 37,327 43,59642,321 24,428 39,630 24,507 13,597

- 4,918 1,3262,193 10,742 1,076 13,782 18,149

159,998 53,534 86,883 122,728 75,342

183,467 (78,617) 30,733 (21,101)

(3,841) (22,257) (56,204) (81,976) (10,016)

1791626 .~~,7,). {134182~ {511243) {311117)

154,963146,853144,483

6,24445,942

498,485

114,483

(174,294)

{59,811}

The accompanying an Integral part of these financial statements-11-

VILLAGE OF ROSEMARY

Notes to the Financial StatementsFor The Year Ended December 31, 2011

1. Significant Accounting Policies

The financial statements of the Village of Rosemary are prepared by management in accordance withCanadian generally accepted accounting principles for local governments established by the Public SectorAccounting Board ("PSAB’) of the Canadian Institute of Chartered Accountants ("CICA’). Significantaspects of the accounting policies adopted by the Village of Rosemary are as follows:

Reporting Entity

The financial statements reflect the assets, liabilities, revenues and expenditures, changes in fund balances,and change in financial position of the Village of Rosemary.

The schedule of taxes levied also includes requisitions for education, health, social and other externalorganizations that are not part of the municipal reporting entit~T.

The statements exclude trust assets that are administered for the benefit of external parties.Interdepartmental and organizational transactions and balances are eliminated.

Basis of Accounting

The financial statements are prepared using the accrual basis of accounting. The accrual basis of accountingrecords revenue as it is earned and measurable. Expenses are recognized as they are incurred andmeasurable based upon receipt of goods or services and/or the legal obligation to pay.

Funds from external parties and earnings thereon restricted by agreement or legislation are accounted for asdeferred revenue until used for the purpose specified.

Government transfers, contributions and other amounts are received from third parties pursuant tolegislation, regulation or agreement and may only be used for certain programs, in the completion ofspecific work, or for the purchase of tangible capital assets. In addition, certain user charges and fees arecollected for which the related services have yet to be performed. Revenue is recognized in the period whenthe related expenses are incurred, services performed or the tangible capital assets are acquired.

Use of Estimates

The preparation of financial statements in conformity with Canadian generally accepted accountingprinciples requires management to make estimates and assumptions that affect the reported amount ofassets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements,and the reported amounts of revenues and expenditures during the period. Where measurementuncertainty exists, the financial statements have been prepared within reasonable limits of materiality.Actual results could differ from those estimates.

Investments

Investments are recorded at amortized cost. Investment premiums and discounts are amortized on the netpresent value basis over the term of the respective investments. When there has been a loss in value that isother than a temporary decline, the respective investment is written down to recognize the loss.

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VILLAGE OF ROSEMARY


Significant Accounting Policies (Continued)

Requisition Over-Levy and Under-Levy

Over-levies and under-levies arise from the difference between the actual levy made to cover eachrequisition and the actual amount requisitioned.

If the actual levy exceeds the requisition, the over-levy is accrued as a liability, and property, tax revenue isreduced. Where the actual levy is less than the requisition amount, the under-levy is accrued as a receivableand as property tax revenue.

Requisition tax rates in the subsequent year are adjusted for any over-levies or under-levies of the prioryear.

Inventories for Resale

Land held for resale is recorded at the lower of cost or net realizable value. Cost includes costs for landacquisition and improvements required to prepare the land for servicing such as clearing, stripping andleveling charges. Related development costs incurred to provide infrastructure such as water and wastewaterservices, road, sidewalks and street lighting are recorded as capital assets under their respective function.

Government Transfers

Government transfers are the transfer of assets from senior levels of government that are not the result ofan exchange transaction, are not expected to be repaid in the future, or the result of a direct financial return.

Government transfers are recognized in the financial statements as revenue in the period in ~vhich eventsgiving rise to the transfer occur, providing the transfers are authorized, any eligibility criteria have been met,and reasonable estimates of the amounts can be determined.

Non-Financial Assets

Non-financial assets are not available to discharge exisdng liabilities and are held for use in the provision ofservices. They have useful lives extending beyond the current year and are not intended for sale in thenormal course of operations. The change in non-financial assets during the year, together with the excessof revenues over expenses, provides the consolidated Change in Net Financial Assets (Debt) for the year.

Tangible Capital Assets

Tangible capital assets are recorded at cost which includes all amounts that are directly attributable toacquisition, construction, development or betterment of the asset. The cost, less residual value, of thetangible capital assets is amortized on a straight-line basis over the estimated useful life as follows:

Land improvementsBuildingsEngineered structures

\’Cater systemWastewater systemOther engineered structures

Machinery and equipmentVehicles

Years15-2025-5o

35-6535-6515-405-203-20

Assets under construction are not amortized until the asset is available for productive use.

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VILLAGE OF ROSEMARY


2. Cash and Temporary Investments

2011 2010

$ $

Cash 202,675 69,124Temporary investments 35~000 325,000

Temporary investments are short-term savings accounts bearing interest at 0.9% and are cashable ondemand.

3. Taxes and Grants in Place of Taxes

Current taxes and grants in place of taxesNon-current taxes and grants in place of taxes

4. Investments

Newell Regional Services Corporation, common shares

2011 2010

$ $

7,652 7,7525~006 368

127658 81120

2011 2010

$ $

10 10

5. Deferred Revenue

2011 2010

$ $

Alberta conditional grants 3521359

Alberta conditional grants were received from external sources and have not been expended in the currentyear.

The use of these funds is restricted to eligible capital projects, as approved under the funding agreements,scheduled for completion in 2012. Unexpended funds related to the advance are supported by cash andtemporary investments of $100,057.

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VILLAGE OF ROSEMARY


JMH&CO.

6. Long-Term Debt

2011 2010

$ $

Tax supported debentures

The current portion of long-term debt is $11,012 (2010 - $10,544).

Principal and interest repayments are as follows:

Principal

$

108~178 118~722

Interest Total

2012 11,012 5,776 16,7882013 11,502 5,287 16,7882014 12,014 4,774 16,7882015 8,067 4,239 12,3062016 3,888 3,935 7,8232017 and on 61,695 24,353 86~048

1081178 48~364 156~541

Debenture debt is repayable to Alberta Capital Finance Authority and bears interest at rates ranging from3.8% to 6% per annum and matures in periods 2015 through 2027. The average annual interest rate is5.50% for 2011 (5.41% for 2010). For qualifying debentures, the Province of Alberta rebates 60% ofinterest in excess of 8% to 12.5% depending on the date borrowed. Debenture debt is issued on the creditand security of the Village of Rosemary at large.

Interest on long-term debt amounted to $6,244 (2010 - $6,691).

The Village’s total cash payments for interest in 2011 was $6,244 (2010- $6,691).

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VILLAGE OF ROSEMARY

JMH&CO.


Debt Limits

Section 276 [2] of the Municipal Government Act requires that debt and debt limits as defined by AlbertaRegulation 255/00 for the Village of Rosemary be disclosed as follows:

2011 2010

$ $

Total debt limit 919,452 805,461Total debt 108~178 118,722

Amount of debt limit unused 8111274 6861739

Debt servicing limit 153,242 134,244Debt servicing 16~788 16,788

Amount of debt servicing limit unused 1171456

The debt limit is calculated at 1.5 times revenue of the municipality," (as defined in Alberta Regulation255/00) and the debt service limit is calculated at 0.25 times such revenue. Incurring debt beyond theselimitations requires approval by the Minister of Municipal Affairs. These thresholds are guidelines used byAlberta Municipal Affairs to identify" municipalities that could be at financial risk if further debt is acquired.The calculation taken alone does not represent the financial stabiliD’ of the municipaliD:.Rather, thefinancial statements must be interpreted as a whole.

8. Tangible Capital Assets

Net Book Value

LandLand ImprovementsBuildingsEngineered Structures

Roadway systemSidewalk, curb and gutterWater distribution systemWastewater treatment system

Machinery and equipmentVehicles

2011 2010

$ $

167,938 167,938238,762 194,811144,375 148,067

510,499 195,727262,865 166,290

1,946,415 1,872,934601,837 516,236104,677 66,180168~465 186,072

41145~833 315141255

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VILLAGE OF ROSEMARY


9. Equity in Capital Assets

Tangible capital assets, Schedule 2Accumulated amortization, Schedule 2Long-term debt (Note 6)

2011 2010

$ $

6,167,396 5,366,344(2,021,563) (1,852,089)

(108,178) (118,722)

4~037~655 3,3951533

10. Accumulated Surplus

Accumulated surplus consists of restricted and unrestricted amounts and equity in tangible capital assets asfollows:

Unrestricted surplus (deficit)

Restricted surplusGeneral operations

Equity in tangible capital assets

2011 2010

$ $

136,321 170,453

50,000 100,0004~037,655 3,395,533

4 223 976 316651986

11. Segmented Disclosure

The provides a range of services to its ratepayers. For each reported segment, revenues and expensesrepresent both amounts that are direcdy attributable to the segment and amounts that are allocated on areasonable basis. The accounting policies used in these segments are consistent with those followed in thepreparation of the financial statements as disclosed in Note 1.

Refer to the Schedule of Segmented Disclosure (Schedule 6).

12e -

VILLAGE OF ROSEMARY


12. Salary and Benefits DisclosureDisclosure of salaries and benefits for municipa! officials, the chief administrative officer and designatedofficers as required by Alberta Regulation 379/94 is as follows:

2011 2010

Benefits andSalary allowances Total Total

$ $ $ $

Mayor 6,263 6,263 3,925Councillor 1 4,388 4,388 2,625Councillor 2 4,087 4,087 2,625Municipal administrator 40,778 7,215 47,993 41,244

1) Salary’ includes regular base pay, bonuses, overtime, lump sum payments, gross honoraria, per diemsand any other direct cash remuneration.

2) Benefits and allowances includes employer’s share of all employee benefits and contributionsor payments made on behalf of employees including pension, healthcare, dental coverage, visioncoverage, group life insurance, professional memberships and tuition.

13. Financial Instruments

14.

15.

The Village’s financial instruments consist of cash and temporary investments, receivables, investments,accounts payable and accrued liabilities, deferred revenue, and long-term debt. It is management’s opinionthat the Village is not exposed to significant interest or currency risk arising from these financial statements.

The Village is subject to credit risk with respect to taxes and grants in place of taxes receivables and tradeand other receivables. Credit risk arises from the possibilitT that taxpayers and entities to which the Villageprovides services may experience financial difficult), and be unable to fulfill their obligations. The largenumber and diversi~’ of taxpayers and customers minimizes the credit risk.

Unless otherwise noted, the fair value of the financial instruments approximates their carrying values.

Approval of Financial Statements

These financial statements were approved by Council and Administration on March 5, 2012.

Budgeted Figures

The budgeted figures, approved by Council on April 11, 2011, have not been audited and are presented forinformation purposes only.

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Documents

VILLAGE OF ROSEMARY FINANCIAL STATEMENTS FOR THE …€¦ · VILLAGE OF ROSEMARY Statement of Operations For the Year Ended December 31, 2011 REVENUE Net municipal taxes, Schedule